When she was a teenager, Kathleen Bacon used to argue with her father, a venture capitalist with seven children, over whether women could have a career and a family and do both things well. “My father was adamant that you couldn’t,” she recalls. “You can be a mum and be a very good mum, or you can have a job and be very good at your job. But if you do both, you’re probably not going to be really good at one or the other.”

Kathleen Bacon

Bacon has spent her life trying to prove her father wrong, and successfully. Now a mother of three teenagers, she is also a London-based managing director of HarbourVest Partners, one of the world’s most influential private equity fund of fund managers, where she manages investments in European and emerging markets funds. In February she celebrated her 20th year at the Boston-based firm, where she has carved out a niche for herself as one of Europe’s most respected investors.

During that time she has helped build HarbourVest’s London office from a team of two to 25 investment professionals, with relationships ranging from buyout powerhouses such as CVC Capital Partners and Cinven to reputable mid-market players such as Waterland and Inflexion.

“I am a great fan of Kathleen,” said one fund manager that counts HarbourVest as an investor. “She is smart, incisive and perceptive. Most importantly, she has substance, and is not carried away by short-term fads, which is not a widespread quality in the investor community.”

Technology lure

Bacon’s career nearly went in a different direction. After graduating with a degree in Russian in 1986, the Boston native worked in banking for five years, followed by two years of business school, where she decided she wanted to get out of finance and into a technology-based job. She was offered a position at Hewlett-Packard and was set to take on the new role at the end of the summer following her graduation, but her engagement to a British national and a desire to work abroad led her to apply for an internship with Hancock Venture Partners, a division of the John Hancock Mutual Life Insurance Company, in Boston.

The firm – which spun out in 1997 to form HarbourVest – had set up a small London operation in 1990 and launched its first international fund of funds the same year. The $200 million vehicle was coming to the end of its investment period, meaning that more resources would be needed in London for the next fundraise.

Bacon was appointed to the London office as an analyst in February 1994, joining George Anson, who had led the operation in Dover Street by himself since it was established. “I don’t know if the footprint of the office is as big as the room we’re in now,” Bacon said from a meeting room in HarbourVest’s current offices in Berkeley Square, a prime location in Mayfair that the firm shares with other financial heavyweights, including the Blackstone Group and BTGPactual.

“At the time, HarbourVest and Pantheon were the only two funds of funds in the market, and George and I were doing everything from primary investments and secondary investments to co-investments.”
Bacon’s career at HarbourVest got off to a good start. During her internship, in the days when the firm was making early and late-stage venture capital investments, she was tasked with sifting through the annual reports of venture firms to identify companies that Hancock should invest in when the next round of financing happened.

A business school project on the internet led her to identify UUNet Technologies, an internet service provider backed by New Enterprise Associates. HarbourVest invested $2 million in the next round of financing, which ended up making the firm 22 times its money. The first transaction she worked on in the London office was an investment in BC Partners V, a €450 million pool of capital raised in 1994 that made its investors five times their money.

Bacon has since built a reputation as a savvy manager. A second fund manager that counts HarbourVest as an investor said: “Kathleen is direct, punchy, but she gets to the nub of it pretty quickly. She’s a good investor and she’s not shy in holding back on her views. It won’t be everyone’s cup of tea in terms of an approach, it’s verging on the aggressive, but you know where you stand.” Bacon’s team is equally well regarded, the fund manager added.

“When you look across some investors, the managing directors are smart and capable, and then you look at tier two and three, and they don’t have the strength in depth. When you look at HarbourVest they’ve got quality people,” he said.

Outside work, Bacon is a huge sports fan – not just playing and watching sports, but analysing how teams work together. “I like reading books about managers and how they motivate,” she said.

Sporting lessons

“I coach a field hockey team, and I love figuring out how to make the team do better. My biggest joy is watching the weakest players on the team stick it out, do better and be part of the team and make a difference.”

This attention to team dynamics is evident at HarbourVest. Bacon manages a team of five people, the shortest-serving member of which has been with the firm for six years.

“People stay at firms because they believe in the strategy, the leadership and the management, and they see growth in some way, shape or form,” she said.

“HarbourVest is one of the leaders in the business. It is going to be the consolidator and the firm that gains as opposed to loses market share, and there are more areas of the world and more parts of our business that we can expand into.” HarbourVest’s ambitious plans are reflective of that, said Bacon.

“So far we’ve been pure play private markets as far as credit and private equity. Infrastructure [funds of funds and secondaries] is an area where we have plans to do something. In terms of regions, places like Africa and the Middle East are virgin markets that we could expand into.”

Bacon is also involved in Women in Private Equity, or Wipes, a 300-strong collective of women in the European private equity industry that gathers for charitable causes. “Wipes is in its walking phase, but it is slowly getting into the jogging. Two years ago, a bunch of us got together and said ‘we know a lot of people in this industry, we should be giving something back’.”

“It’s all about giving back to the arts,” said Bacon. “But also there’s a women’s philanthropic side to it that the gallery supports through allowing local women prisoners or underprivileged women in that area to learn arts and crafts at the gallery. It sounds pretty simple, but it gives them a whole new lease on life and a whole new way of thinking about themselves and what their own self-worth is about.”

Advocate

Bacon is also a big advocate of the need for more women in senior positions in private equity. She is one of 28 managing directors at HarbourVest – seven of whom are women, a rarity in an industry where the proportion of women in top roles hovers around 10%. Bacon says she is lucky to have a supportive husband who is a stay-at-home father, a luxury that many women in the industry do not have.

“On the [private equity firm] side, when you get to the mid-level stage, it is so unbelievably intensive and your life is not your own at all. It’s physically very difficult to be up late at night working on a deal, and you get home and your child is sick. [Firms] need to recognise that women can’t sustain the same amount of output. They need to be co-leads on deals during that time period.

“When you come out of that, I have seen a number of women doing fantastic deals, and they’re now more efficient than their male counterparts because they’ve had to juggle so many things. It’s that middle time period where [firms] have to cut some slack.”

This article was first published in the print edition of Financial News dated May 12, 2014